| 2013-01-28

Monopoly tax on gas and power transporters and distributors most probably not recognized in tariffs

According to a press article of Friday, citing the president of the Regulatory Authority in the Energy Sector (ANRE) the monopoly tax for the gas and power transporters and distributors will probably not be recognized in the tariffs of the operators.

He also stated that ANRE is considering changing the methodology for setting the tariffs to reduce the dependence of the operators on volumes transported/distributed, which in fact we believe would benefit the operators. In our view, this would be best achieved through a focus on tariffs on capacity reserved. Another envisaged change to the current framework relates to royalties, which might no longer be recovered from the consumers. Still, we place low chances on this change to materialize in the short term.

At present, we believe that most probably this monopoly tax would not be recognized in tariffs at least in the short term, which would be negative for Transgaz, Transelectrica and the gas and power distributors in Fondul Proprietatea portfolio, but we believe this has already been incorporated in the share prices.